Switzerland financial services

Swiss Re’s Q3 profit down 16%

November 4th 2016 | Switzerland | Insurance | Swiss Re

On November 3rd Swiss Reinsurance Co Ltd said its net profit fell 16% to US$1.2bn for the quarter ended September 30th, owing to weak market conditions and agricultural losses in Europe. The property and casualty reinsurance division saw net profit plummet 32% to US$678m. Meanwhile, earnings at the life and health unit fell 20% to US$218m, despite a growth in premiums in the Americas and Asia.

However, Swiss Re's net profit was higher than analysts' expectations owing to a growth in investment income and underwriting fees. The reinsurer's annualised return on investment (ROI), a measure of efficiency, increased by 30 basis points to 3.5% from the same period last year.

Total premiums earned and fees rose 10% to US$8.6bn. However, in terms of profits, all units reported a weaker result other than Corporate Solutions and Life Capital, where investment gains fuelled a seven-fold rise in profits to US$157m.

For the first nine months of the year, Swiss Re posted a 17% drop in net profit to US$3bn owing to higher payouts for natural disasters. The company maintained that this was a solid quarter given a difficult operating environment and announced the commencement of a Sfr1bn (US$1bn) share buyback programme to return excess capital to shareholders.